STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. v. LIGHTNER

The opinion of the court was delivered by: J. SMYSER, Magistrate Judge

MEMORANDUM AND ORDER

The complaint for a declaratory judgment was filed on February
28, 2005 by the plaintiff State Farm Mutual Automobile Insurance
Co. Doc. 1. The answer was filed by defendant Julie Lightner, an
insured, on March 11, 2005. Doc. 3. The parties consented to a
magistrate judge as the judge of the case pursuant to
28 U.S.C. § 636(c).

The jurisdiction of the court is based upon the diversity of
citizenship of the plaintiff and the defendant. 28 U.S.C. § 1332.
The plaintiff is an Illinois corporation. The defendant is a
resident of Dauphin County, Pennsylvania. The defendant on September 22, 2005 filed a motion for summary
judgment, Doc. 10, and a brief, Doc. 11. The plaintiff on
September 30, 2005 filed a motion for summary judgment, Doc. 12,
and a brief, Doc. 13. The defendant's brief in opposition to the
plaintiff's motion was filed on October 11, 2005. Doc. 15. The
plaintiff's brief in opposition to the defendant's motion for
summary judgment was filed on October 11, 2005. Doc. 16. Reply
briefs were not filed, and these motions are ripe to be decided.
This memorandum and order addresses the parties' motions for
summary judgment. We find there not to be a material factual
issue in dispute and conclude that the plaintiff is entitled to
judgment as a matter of law.

It is undisputed that Julie Lightner sustained injuries in a
motor vehicle accident in September of 2003. She was insured
under a State Farm Mutual Automobile Insurance Company policy of
motor vehicle insurance, policy number 668-8213. Policy number
668-8213 was issued upon the application of Robert Lightner,
Julie Lightner's father, in 1988. In the application, Julie was
listed as a driver of the vehicle insured under the policy. In
the 1988 application, Robert Lightner requested liability limits
under the policy of $100,000 per person, $300,000 per accident. Robert Lightner
selected limits upon coverages for uninsured or under-insured
motorist caused injuries of $15,000 for person, $30,000 per
accident. Robert Lightner signed and dated an uninsured
motorist/under-insured motorist ("UM/UIM") "sign down" form
specifically selecting lower UM/UIM limits than the policy's
liability limits.

On April 13, 1989, policy number 668-8213 was amended. A
"change menu" was signed by Robert Lightner. The effect of the
change was that he was no longer the named insured and that Julie
Lightner was thereupon and thereafter the named insured under the
policy. Julie Lightner was not requested to sign a UM/UIM "sign
down" form and did not sign such a form.

After the motor vehicle accident in September of 2003 in which
Julie Lightner sustained personal injuries, the plaintiff State
Farm paid her $15,000 in UIM benefits. She seeks further UIM
benefits.

From the inception of policy number 668-8213, the premiums paid
under the policy were for UM/UIM benefits in the amount of
$15,000/$30,000 and not for UM/UIM benefits in the amount of $100,000/$300,000. Julie Lightner paid a premium to
acquire $15,000 in UIM coverage each year, and that is the
coverage that was stated in the policies issued to her.

Summary judgment is appropriate if the "pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving
party bears the initial responsibility of informing the court of
the basis for its motion and identifying those portions of the
record which demonstrate the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). The moving party may discharge that burden by "`showing'
 that is, pointing out to the district court  that there is an
absence of evidence to support the nonmoving party's case." Id.
at 325. Once the moving party has met its burden, the nonmoving
party may not rest upon the mere allegations or denials of its
pleading; rather, the nonmoving party must "set forth specific
facts showing that there is a genuine issue for trial."
Fed.R.Civ.P. 56(e). An issue of fact is "`genuine' only if a reasonable jury,
considering the evidence presented, could find for the non-moving
party." Childers v. Joseph, 842 F.2d 689, 693-94 (3d Cir. 1988)
(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249
(1986)). A material factual dispute is a dispute as to a factual
issue that will affect the outcome of the trial under governing
law. Anderson, supra, 477 U.S. at 248. In determining whether
an issue of material fact exists, the court must consider all
evidence in the light most favorable to the non-moving party.
White v. Westinghouse Electric Co., 862 F.2d 56, 59 (3d Cir.
1988).

"[T]he plain language of Rule 56(c) mandates the entry of
summary judgment, after adequate time for discovery and upon
motion, against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party's
case, and on which that party will bear the burden of proof at
trial." Celotex, supra, 477 U.S. at 322. "Under such
circumstances, `there can be no genuine issue as to any material
fact, since a complete failure of proof concerning an essential
element of the nonmoving party's case necessarily renders all
other facts immaterial.'" Anderson v. CONRAIL, 297 F.3d 242, 247 (3d Cir. 2002) (quoting Celotex, supra,
477 U.S. at 323).

There is no fact that is material to the determination of this
case that is in dispute. The parties argue for competing
determinations of the issue based upon two different legal
theories. The plaintiff insurer asserts that the sign down
executed by the initial named insured, Robert Lightner, the
defendant's father, did not become inoperative or invalid after
the insurance policy had been transferred by him to his daughter.
The defendant insured asserts that the successor named insured is
correctly held to be entitled to UIM coverage equal to bodily
injury liability coverage without regard to a predecessor named
insured's election under the same policy to lesser UIM coverage
limits, unless the successive named insured signs down. Neither
party argues for fact specific variations in these two competing
theories that would indicate the presence of material factual
issues in this case.

75 Pa. C.S. § 1731(a) provided before 1990:

"(a) General rule.  No motor vehicle liability
insurance policy shall be delivered or issued for
delivery in this Commonwealth, with respect to any
motor vehicle registered or principally garaged in
this Commonwealth, unless uninsured motorist and underinsured motorist
coverages are provided therein or supplemental
thereto in amounts equal to the bodily injury
liability coverage except as provided in section 1734
(relating to request for lower or higher limits of
coverage)."

75 Pa. C.S. § 1731(a) provided after the 1990 amendment:

§ 1731. Availability, scope and amount of coverage

(A) Mandatory offering.  No motor vehicle
liability insurance policy shall be delivered or
issued for delivery in this Commonwealth, with
respect to any motor vehicle registered or
principally garaged in this Commonwealth, unless
uninsured motorist and underinsured motorist
coverages are offered therein or supplemental thereto
in amounts as provided in section 1734 (relating to
request for lower limits of coverage). Purchase of
uninsured motorist and underinsured motorist
coverages is optional.

75 Pa. § 1734 provides:

§ 1734. Request for lower limits of coverage

A named insured may request in writing the issuance
of coverages under section 1731 (relating to
availability, scope and amount of coverage) in
amounts equal to or less than the limits of liability
for bodily injury. The defendant's position is that she is not a named insured who
requested in writing that her coverages under 75 Pa.C.S. § 1731
be in amounts equal to less than her policy's limits of liability
for bodily injury. Since she made no such request, she asserts,
it was not proper under the Pennsylvania statute for her UIM
limits to be set lower than her liability coverages. The
plaintiff insurer considers the first named insured's request to
have bound the subsequent named insured in the absence of action
by the latter to raise the UM/UIM coverage amounts.

The defendant's position, if held to be correct, would mean
that upon a change from a first named insured to a second named
insured, in the absence of a Section 1734 written request from
the second named insured, the insurer's legal duty would be to
raise the UM/UIM coverages as a matter of course to the level of
the liability coverages and to accordingly raise the premiums.

75 Pa. C.S. § 1731 requires that uninsured and under-insured
motorist coverages be offered in any Pennsylvania motor vehicle
insurance policy. It provides that such coverages may be
rejected. After 1990, it contains no express presumptive or mandatory level of uninsured or under-insured motorist coverages
but has been consistently construed to require UM/UIM coverage in
the same amount as the policy's bodily injury liability coverage.

A construction of 75 Pa. C.S. § 1731(a) and § 1734 as the
defendant advocates would not create an unworkable burden upon an
insurer. The insurer is, of course, a participant in the process
of the replacement of one named insured by another named insured,
and could treat the substitution of a new named insured for a
former named insured as an occasion to ascertain the new ...

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